Question

Godavari energy limited is searching options to raise ₹35000 crores from the primary

market for diversification and modernisation of existing projects. It hired the services

of a renowned financial consultancy firm, ABC Finance Pvt. Ltd. for suggesting

options for the same. ABC Finance Pvt. Ltd. suggested a list of options to the Board

of Directors of the company. It was decided that for the immediate requirement of

₹15000 crores the company will give a privilege to existing shareholders to subscribe

to a new issue of shares according to the terms and conditions of the company.

₹5000 crores would be raised by allotment of securities to a consortium of financial

institutions, instead of inviting subscription from the public by making a direct appeal

to investors to raise capital. It was further decided to raise capital to the tune of

₹8000 crores through an issuing house. All these options were accepted by the

Board of Directors. The Board further decided to raise ₹7,000 crores through the

online system of the stock exchange by entering into an agreement with the

exchange.

Q.13 “₹5000 crores would be raised by allotment of securities to a consortium of

financial institutions, instead of inviting subscription from the public by making a

direct appeal to investors to raise capital.’’ Identify the method of floatation of new

issues in the primary market being discussed above, which the company has

decided to use.

a. Offer for sale b. Private placement

c. Right Issue d.Offer through Prospectus​
Q.14 Identify the method of floatation of new issues in the primary market, not taken
up by Godavari energy pvt. Ltd..
a. Offer for sale b. Rights issue
c. E-IPO d. Offer through prospectus
Q.15 How much money was raised by the company through E-IPO’s
a.₹8000 crores b. ₹7000 crores
c. ₹5,000 crores d. 35000 crores
Q.16 Identify the reason which has made the firm raise funds from the institutional
investors.
a. It helps to raise funds quickly b. It is not expensive
c. Both a & b d. None of the above.

Answer 1

Answer:

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